Lower Merion School District

Yesterday was a big win for taxpayers in the Lower Merion School District.

You may recall that last year Lower Merion School District was ordered to revoke its latest tax hike, saying that the school district mislead taxpayers by projecting large budget deficits as justification for raising taxes. The class-action lawsuit was filed by Arthur Wolk, a lawyer who lives in Gladwyne. The judge in the case determined that Lower Merion School District actually had socked away millions of dollars.

According to the judge’s findings, Lower Merion School District got away with raising taxes above the Act 1 index of 2.4 percent by saying the money was needed to cover soaring special-education and employee pension costs, two of the biggest expenses for most public school districts. It was determined that Lower Merion School District, one of the wealthiest school districts in the Philadelphia area, deliberately over-estimated deficits and failed to adequately predict surpluses; thus allowing the stashing of millions in reserves.

Taxpayers in Lower Merion School District had long complained about the yearly tax increases, as they watched the end-of-the-year surpluses continue to grow.

Lower Merion School District appealed the court decision of August 2016 and we learned yesterday that the lawsuit was thrown out on a technicality – apparently the school district failed to file the motions within the 10-day deadline. Wonder who was responsible for that ‘oversight’ … their business manager, their solicitor Ken Roos? Coincidentally, Roos of Wisler Pearlstine, is also the solicitor for TE School District. In addition to refunding millions of dollars, the taxpayers have the burden of legal fees from the original lawsuit and from the appeal. Wow.

An unprecedented ruling, the win for taxpayers in Lower Merion School District could pave the way for other school districts to follow suit. The following chart shows TESD tax increases over the last thirteen years. And from recent budget workshops, we know the preliminary TESD 2017-18 budget proposes another tax increase. 2004-05 was the last zero tax increase year.

During the last several years, most tax increases have ended up as surplus in the operations of the TESD schools and now those taxpayer dollars are sitting in the District’s fund balance – which is currently $32 million!This is not an argument about adequately funding and maintaining the high level of quality of our schools.

The ruling in Lower Merion School District should provide a wake-up call to all school districts who justify tax increases but end up with surpluses year after year.

With an agenda of 110 pages, the community is fortunate to have residents willing to review the information in advance of meetings. Ray Clarke provides the following commentary regarding the agenda (click herefor agenda).

There are a couple of items that the community might want to pay particular attention to in the light of the recent injunction ordering Lower Merion School District to roll back this year’s tax increase.

To recap, the Montgomery County judge found that LMSD (quoting from the injunction) deliberately over-estimated deficits, failed to predict surpluses, represented to PDE that costs for Special Education and retirement could not be covered without a tax increase, and transferred Fund Balance to assigned accounts to avoid the statutory cap of 8% of the annual budget while still raising taxes. The judge found that LMSD’s Fund Balance commitments were funded out of the budget each and every year.

These findings will seem very familiar to those following the affairs of TESD. Moving to the agenda:

Item 6, Bond Discussion: TESD is considering repayment of $18 million of higher interest bonds – arguably a sensible move – but by issuing yet more bonds at mostly 4%, when there is $32 million of taxpayer money sitting in the General Fund, supposedly “committed”, earning about 0.75%.

Item 7, Capital Funding/Fund Balance: Seemingly to support this plan (only one option is presented), the district is re-publishing its Fund Balance Policy and Regulation (not always consistent with each other), along with the commitments from 2015/16, presumably to establish commitments for 2016/17. There is no analysis of the capital spending plan.

A couple of questions:

– Does TESD plan to continue the Fund Balance fiction that brought judicial sanction on LMSD?

– Are we going to borrow another $18 million we don’t need at the second “generationally low rates” in two years? (About a percentage point lower than those last generationally low rates). And pay underwriters and lawyers $150,000?

A significant decision in the Arthur Wolk vs Lower Merion School District(click on bolded link to read 17 pg. decision) case was rendered by Montgomery County Common Pleas Judge Joseph Smyth this week. Judge Smyth ordered Lower Merion School District to revoke its tax hike, claiming that the school district could not increase taxes for 2016-17 by more than 2.4 percent. If a Lower Merion resident could take on his school district for over-taxing (and win), this decision has far-reaching ramifications for other school districts, including T/E School District. Not only front page news locally in the Philadelphia Inquirer but the Associated Press has picked up the story with articles appearing in the Washington Post, Boston Globe and beyond.

In his decision, Judge Smyth ruled that Lower Merion School District had consistently understated revenues and overstated expenses so it could falsely raise taxes when in fact it had huge surpluses. TE School District residents are you listening? Our school district has raised taxes for the last 12 years (see chart below) and continues to build its fund balance. The TE School District fund balance as of June 2016 school board meeting is $32,381,047. Just like Lower Merion School District, our school district continues to raise taxes and increase the fund balance. Folks, that is $32+ millions of taxpayer dollars!

Taxpayers in TE School District have seen their taxes increased for the last twelve years as follows:

2016-17: 3.6%

2015-16: 3.81%

2014-15: 3.4%

2013-14: 1.7%

2012-13: 3.3%

2011-12: 3.77%

2010-11: 2.9%

2009-10: 2.95%

2008-09: 4.37%

2007-08: 3.37%

2006-07: 3.90%

2005-06: 1.40%

2004-05: Zero Tax Increase

Will the Court’s decision to revoke Lower Merion School District tax challenge the TE School Board to reconsider their budgeting approach?

Attending TESD Finance and School Board meetings over the years, we have witnessed knowledgeable, educated residents appeal to the District on this subject – Ray Clarke, Neal Colligan, Doug Anestad, etc. have repeatedly weighed in on financial issues with their comments and suggestions. The discussion of the TESD 2016-17 budget even had former Tredyffrin Township Supervisor Mike Heaberg attempting to reason with the school board. Sadly, the school board does not listen – but continues to increase our taxes, build its mountain of “fund balance” dollars and, for the most part, does so with a unanimous 9-0 vote. Where does it end?

Having read the decision in the Lower Merion School District case, Neal Colligan (with input from Ray Clarke) provides the following economic analysis between LM and TE school districts. Thank you both – and here’s hoping that the TE School Board reads it!

I know we’ve all been reading with great interest the results of the Lower Merion tax case which made its way to page 1 of the Inquirer today. This is frighteningly similar to the operations of our School District and I thought it might be interesting to do some comparisons.

The resident case against the LMSD basically argued that they had District had entered into a pattern of projecting annual operating deficits during their budget (and tax rate increase) process and ended each year with large surpluses. The lower Court judge agreed and ordered LMSD to rescind some of their current tax increase. As you know; we’ve experienced the exact same pattern in T/E. For each of the last 5 years; the District has projected a deficit in its budget deliberations; set an aggressive tax (sometimes the Max allowed in the Commonwealth) increase to “close the gap” ; and each year ended in a Surplus position. It might be fun to dig deeper.

LM’s current budget allocates approximately $259 MM to District spending; T/E’s current budget is about $131 MM…just about half the size. According to the press releases; LM accumulated $40 MM in Fund Balance over the last 6 years (16% of current budget); T/E has accumulated about $13 MM (10% of current budget). In the prior six years LM taxes increases have been 21.01%; in T/E we’ve had 18.68%. (The Judge’s order states that since 2006 LMSD has increased its taxes by 53%; the increase in T/E has been 38%. I used the more narrow, recent figure as LM’s increases were skewed in the early years). LM’s accumulated Fund Balance is reported at over $57 MM (all Fund/Capital accounts included); T/E’s is about $42 MM (this includes Fund Balance and Capital Fund which was funded by Fund Balance transfer)…about 74% of LM. Let’s go deeper: The Court commented in the LM suit that the District’s average overestimation of expenses was 5.5% and the average underestimation of revenues was 1.1%. T/E has a similar history (I say it differently); in the last 10 years, our District has spent about 96% of its budgeted expenses (this budget drives the tax increase obviously) and collects about 101% of its budgeted revenue. Does it all seem similar?

Some other interesting notes. LM Enrollment growth in the last 4 years-9.03%; T/E Enrollment growth 1.46% (this statistic was used in the LM budget presentation to justify the tax increase). Students (approximate): LM-8,200; T/E; 6,400. Years in the last 6 that tax increase was in excess of Act 1: LM-6; T/E-5. EIT in community: LM-No; T/E-No. Special Education budget: LM-$46 MM; T/E-$20 MM. Salaries: LM-$123 MM; T/E-$57 MM.

In many ways, we compare favorably to LM. Remember that LM spends the highest amount on a per-student basis in the State. Without getting too far into the weeds; the fact remains that we, like our neighbors in LM, have been given deficit budgets in each of the last 5 years followed by “necessary” aggressive tax increases. Our results have been a production of SURPLUS in each of those years; just like LM. That’s the fact pattern that this suit took to question. The same fact pattern exists here…almost precisely. It’s nothing new; we’ve talked about in the T/E Finance Committee meeting for years BUT now there’s a new finding from the Courts.

The TE School District’s Education Committee meeting included a surprising (and expensive) item on the agenda – the proposal to outfit all teachers and grade 7-12 students with District issued laptops.

A few short weeks ago, the school board approved a preliminary budget which included a 4.3% tax increase. With that unanimous vote, the Board assured the residents that expenses would be thoroughly reviewed ‘line by line’ in the coming months. And then we learn this week that this same board is discussing spending an estimated $1.8 million on teacher and student laptops. Where’s the fiscal responsibility?

Setting aside the expense of the laptops, is there research indicating this is a current school district need? Don’t the majority of the teachers and students in the District already have computers? If a need for a computer exists with any of the students, it certainly should be met but has anyone polled the students/parents? What level of laptops are proposed? My guess is that many of our students and teachers already own a higher quality of computers than the District is proposing.

And what about liability issues that could arise with giving our students computers? Remember the Lower Merion scandal and subsequent lawsuit over district-supplied computers and the webcam spying on students. How will TE parents know that their children are protected from something similar? No one wants to believe that these things could happen in TE, but has the school board thought about security measures to protect the privacy of the students.

Because I did not attend the Education Committee meeting, I wanted to know if other residents shared my concerns. Resident Doug Anestad attended and provides the following update for Community Matters:

The administration would like to buy a laptop for every teacher and student in grades 7-12 in what is commonly called one-to-one laptop program. They would roll it out over a three years. Each laptop would cost about $400 and they would purchase a 4 year warranty and accidental damage protection for $200 for a total cost of $600.

The school district just finished rolling out bring your own device (BYOD). However, they argue that it is not ideal because
– No expectation that all students will have a device
– No expectation that all devices will be the same
– Transformative on individual level
– Supplemental devices needed if instruction requires device
– Focus on device over instruction

They argue that 1:1 would be beneficial because
– Expectation that all students will have a device
– Expectation that all devices will be the same
– Transformative on class level
– Supplemental devices not needed
– Focus on instruction over device

As each laptop will cost around $600 ($400 + $200) and there are almost 3,000 students and teachers in grades 7-12, you are talking of a roll-out cost of around $1.8 million ($600 x 3,000). After the initial roll-out, I estimate would be an ongoing cost of around $450,000 ($1.8 every 4 years). These costs do not include software nor administrative overhead costs.

I find it disappointing that the education committee voted to proceed with this project right after the school board voted to approve a preliminary budget that increases our taxes 4.3% while still showing a projected deficit of $468,118.

I was a teacher for a decade. I taught grades 7-12. I taught math, science, and computer science. With the obvious exception of computer science, I never felt the need for the students to have computers every day.

I believe that teachers should have smart boards and laptops and should have access to either laptop carts or computer labs on those days when computers would be helpful. I also support the Office 365 initiative as it allowed all students to have access to the same software so that documents can be exchanged with fellow students and teachers as well as allowing shared documents.

I cannot however, support this abuse of taxpayer money when there is so much financial uncertainty and after so many massive tax increases over the past decade that show no sign of slowing down.

Last week a tentative agreement was reached between Lower Merion School District and their teachers. The deal between LM and the union was made in secret, with a process devoid of transparency. The proposed teacher’s contract and its terms were not published for public review.

There are rumors that the TE School District is currently in ‘Early Bird’ contract negotiations with the teacher’s union. Because of the existing situation in Lower Merion, rumors of early bird talks and five seats on the TE School Board up for grabs on Election Day, there was discussion as to where our candidates stand on this issue. The following email was sent to the ten Tredyffrin and Easttown school board candidates on Saturday.

To All TE School Board Candidates:

I know that you are all very busy campaigning in advance of Election Day. Tredyffrin resident Ray Clarke added a comment on Community Matters regarding the teacher contract, negotiations and keeping the public informed. He has spoken with several of you regarding his concerns, particularly given what is currently going on in Lower Merion School District. As a result, I am asking you to read the following and provide a very brief (100 words or less) response to me by 9 PM, Sunday, Nov. 1. The question and all candidate responses received will appear on Community Matters on Monday, Nov. 2.

Negotiating union contracts (teachers and support staff) will be important tasks for the new Board. In Lower Merion School District, a secret deal is playing out between their school board and the teachers union. Much to the chagrin of Lower Merion taxpayers, the union members get to review the contract before signing but the public is left in the dark and provided no information.

During the last teachers’ contract negotiations, the TE School Board moved in the correct direction with periodic updates to the public. Assuming that there are no secret “Early Bird” deals already in discussion between the current Board and the union, [if elected] where do you stand on publishing any proposed contracts to the public at the same time as the unions send it to their members? In addition to publishing the terms of the contract to the public before signing, to also include the full annual cost of the contract for each year (including PSERS, salaries, benefits, etc.) with an explanation of how the Board will pay the costs.

Again, I understand that you are pressed for time and I thank you in advance. Your responses may help get additional voters to the polls on Tuesday.

Pattye Benson

Because I know how busy the candidates are in the last days leading up to the election, their responses were to be brief – 100 words or less. One hundred words is very short; the second paragraph in the statement above (from “During … costs.”) is 109 words.

During this campaign season, most every school board candidate has used themes of transparency, public engagement and responsiveness to citizens in their campaigning literature, meet and greets with voters and during the Chester County League of Women Voters candidate forum. It is for that reason, that a brief response would allow each candidate the opportunity to restate and to reconfirm their transparency commitment to the voters before Election Day tomorrow (November 3).

The four Democratic school board candidates from Tredyffrin (Alan Yockey, Michele Burger, Roberta Hotinski and Todd Kantorczyk) each sent similar emails; all declining to respond, citing time constraints due to the campaign and/or previous personal commitments. There was no response from Kris Graham. If, as rumored (and I do say if) there are early bird negotiations already underway between the TE School District and TEEA, the District teacher’s union, it would not be possible for Ms. Graham to respond.

The TE School Board candidate responses are as follows:

Neill Kling, Tredyffrin East, Region 1 candidate:

A cloak and dagger approach serves neither party. The union must understand throughout that what their members receive can be no more than what our tax base will reasonably be able to bear. The current PESERS situation resulted from disregard of that sound principle. Thus, I believe that the taxpayers should view the contracts when they are sent to the teachers for approval. I am also in favor of providing a public estimate of how we propose to meet the contractual obligations. The District must conduct negotiations with this estimate uppermost in mind. Publishing it when they are completed is responsible stewardship.

Neal Colligan, Tredyffrin East, Region 1 candidate:

Of course, the public should be informed as negotiations move forward….this is by far the largest municipal contract in our community. Start now by presenting the existing economics…total salary, benefits, pension contribution…show the history of these costs. This information, reviewed at an entity level, will not disclose any employees’ personal compensation package and will not violate the rules of new contract discussions. As the process advances, let the community know of the issues…I doubt the Union side would object. People here are pretty fair and can draw their own conclusions on what is just as negotiations move towards a new contract.

From Ed Sweeney, Tredyffrin West, Region 2 candidate:

I would strongly agree to the first proposal if it was consistent with current agreement between the School District and the Union and with the provisions of relevant labor law. As far as his other proposals, I need more information but I am a proponent of maximum disclosure at the appropriate time.

I agree with the principle of “MORE” . . . more transparency, more public disclosure, more committee meetings convenient to working parents, and more involvement of residents and stakeholders at an early stage of committee consideration of issues. In my view, more = better. More increases public confidence and protects the taxpayer.

From Kate Murphy, Easttown, Region 3 candidate:

In Pennsylvania, salaries and benefits make up the lion’s share of any school district’s budget, generallybetween 70% and 80%. Pension benefits (PSERS) are set legislatively by the General Assembly and the Governor, and are not negotiated by local school boards. All collective bargaining agreements must be available to the public for review and comment well in advance of the public vote to approve such agreements. Periodic updates during the negotiations can be a helpful tool to inform the public. District estimates of the full annual cost of the contract for each year should be available for timely public examination.

From Fran Reardon, Easttown, Region 3 candidate:

In negotiating contracts within the School District, we should maintain a high level of transparency for all parties involved. Periodic updates should be available to the taxpaying public and all other stakeholders. Current annual cost of contracts should clearly be given with the long term effects of PSERS obligations also laid out and presented to the TE community in a timely fashion before any vote by the school board.

As a member of the TE School Board, I will work with the full board to give the taxpayers value for their dollar and also maintain the excellence of our schools.

There is an opt-out movement against standardized testing in public schools playing out across the country. Opponents of the exams argue that too much time in public education is spent teaching to the test, stressing out students and teachers and detracting from real learning time. Locally, the anti-standardized testing is gaining traction among parents in Lower Merion, Radnor and Tredyffrin Easttown School Districts – just as the Pennsylvania school district PSSA standings for 2015 are released.

The Pennsylvania System of School Assessment (PSSA) formula ranks the school districts based on three years of state standardized test scores, giving the most weight to the current year. The PSSA is a standards-based assessment of what a student should know and be able to do at varying levels in reading, writing, science and math. Reading and math is assessed in grades 3 through 8 and grade 11; writing is assessed in grades 5, 8 and 11 and science assessed in grades 4, 8 and 11. The rankings do not denote the overall quality and performance of the school district, only the PSSA scores.

A Pennsylvania school district that places in the top 15 or 20 out of 500 districts statewide based on the PSSA exams is an achievement for which students, parents, teachers and administrators can all be proud. Proponents of standardized testing view PSSA scores as a reliable predictor of future success. As a tool for student assessment, the PSSA exam helps measure and provides useful information of what students are learning. The PSSAs measure the performance of the entire class and provide of measurement of how an overall class is performing. But some parents have chosen not to have their kids participate, claiming the tests cause undue stress for kids, and have no direct benefit.

The Pennsylvania school district’s PSSA rankings for 2015 are now available and reported in Pittsburgh Business Times. This is the fifth consecutive year that I have tracked the top 15 school districts in Pennsylvania as ranked by the PSSA results. Results reveal that Unionville Chadds Ford School District (UCFSD) in Chester County is holding on to top placement. The yellow highlighted line in the chart below indicates that T/E School District has fallen in PSSA rankings each year during the last five years. The District was second in 2011, third in 2012, fourth in 2013, fifth place in 2014 and for 2015 dropped to seventh place in the PSSA rankings.

2015

2014 2013 2012 2011 School District (County)

8

4

1

1

1

Upper St. Clair (Allegheny)

5

2

2

5

6

Mt. Lebanon (Allegheny)

1

1

3

2

3

Unionville-Chadds Ford (Chester)

7

5

4

3

2

Tredyffrin-Easttown(Chester)

10

8

5

6

5

North Allegheny (Allegheny)

2

3

6

4

4

Radnor (Delaware)

4

6

7

7

9

Hampton Township (Allegheny)

3

7

8

10

12

South Fayette Township(Allegheny)

6

9

9

8

7

Lower Merion (Montgomery)

12

12

10

9

8

Central Bucks (Bucks)

9

10

11

13

15

Wallingford-Swarthmore (Delaware)

13

13

12

12

11

Fox Chapel Area (Allegheny)

16

11

13

14

13

Great Valley (Chester)

15

15

14

11

11

Peters Township (Washington)

11

14

15

19

19

Rose Tree Media (Delaware)

After UCFSD (Chester County) in the PSSA rankings, Radnor (Delaware County) moved up to second place, followed by South Fayette (Alleghany County) in third, Hampton Township (Alleghany County) in fourth, Mt. Lebanon (Alleghany County) in fifth and Lower Merion (Montgomery County) moved up from ninth to sixth.

Interesting to note that Radnor and Lower Merion School Districts advanced on the state-wide PSSA rankings; both districts ahead of TE, which dropped to seventh. The TE School District has continued a steady downward movement in the PSSA rankings during the same period that Radnor and Lower Merion school district improved their scores. The question is why are the PSSA rankings going down in TE rather than up. The only other local Chester County school district represented at the top of the PSSA rankings chart is the Great Valley School District, which dropped from eleventh to sixteenth in the 2015 list.

We know that Pennsylvania parents that oppose standardized testing is advancing. In 2012, only 260 Pennsylvania students opted out of the math and reading PSSAs. In 2014, more than 1,000 of the 800,000+ eligible students opted not to take the tests according to the Pennsylvania Department of Education. It will be interesting to see if the PSSA rankings change substantially as the students opting out of the standardized testing increases.

Parents in TE School District have arranged for the screening of the documentary, “Standardized Lies, Money & Civil Rights: How Testing is Ruining Public Education” created by a Berks County teacher is scheduled for the Saturday Club in Wayne on April 27 at 7 PM. According to the film’s website, its purpose is to “shed light on the invalid nature of these tests, the terrible consequences of high-stakes testing, and the big money that’s involved.”

Congratulations TE School District! ‘Niche’ which measures neighborhoods and cities for livability, compares k-12 schools and reviews over 8,000 colleges and universities has released their 2015 national school district rankings.. The Niche K-12″ report, which compares 120,000 k-12 schools has been released. For those interested in rankings, Tredyffrin-Easttown School District was listed as third in the country and first in the state.

Here’s Niche’s ranking of the ‘Top 10’ school districts in the country:

In addition to TESD (3rd) and Lower Merion School District (4th) Unionville Chaddsford School District and Radnor Township School District also made Niche’s national ranking of school districts, coming in at 15th and 52nd places, respectfully. In addition to the school districts, Niche ranked the 14,000+ public high schools. On the national ranking of individual high schools, Conestoga HS was listed as 26th in the country and first in the state.

Further information about Niche and their rankings, can be found on their website, www.niche.com

Now that the 2nd vote on the Fact Finder report is behind us, it is my understanding that the school board and the teachers return to traditional method of negotiations. As the clock ticks down the remaining days of summer vacation, can we assume that schools in T/E will open on schedule. It is my understanding that until there is a new contract; the teachers will continue to work to the terms of their expired contract.

But how long can the T/E school district budget afford for the teachers to work to the old contract?

The Neshaminy teachers and the school district have been locked in a vicious contract debate for 4+ years with neither side willing to budge – sticking points in the bitter contract dispute is healthcare and salary. It is my understanding that the teachers want a 5% salary increase retroactively for the last 4 years.

As I wrote in January of this year, the teachers in the Neshaminy School District are the highest paid in the state but if we look at PSSA results, the Neshaminy School District doesn’t even make the top 50 in the state, coming in at number 245 among Pennsylvania’s 500 districts. Over half of the Commonwealth’s school districts have outperformed Neshaminy on PSSA tests for the last 10 years. Compare that to Tredyffrin Easttown School District and the ranking of third in the state. If the highest paid teachers, working in a school district that underperforms 50% of all other school districts in the state, are willing to strike twice in 6 months … what does that mean for other districts with teacher contracts pending?

Lower Merion School District is in a similar situation to TESD. Lower Merion’s teacher contract expired the end of June and the 1,300 union members are working ‘for now’ under the provisions of the old one. With school scheduled to open on Tuesday in Lower Merion, the School District officials and the union are set to negotiate tonight to see if they can settle.

Most people who I have spoken with do not believe that our teachers will strike in TESD. I am not sure what is to be gained by a teacher strike, aside from many aggravated parents. Or is it possible that teachers can be pushed to a point where they feel this is their only option?

The T/E School Board meeting on Thursday night was rather anticlimactic. Most of us who have been following the budget process were not surprised by the 3.3% tax increase (1.7% Act 1 Index, 1.6% referendum exceptions) for the 2012-13 school year. Based on the District’s average residential assessment of $252,601, this translates to an average increase of $155 per homeowner in their tax bill.

The Act 1 Index increase will produce projected revenue of $1.5 million and the exceptions increase projected revenue of $1,498,916. The total revenue produced by the 3.3% tax increase is $2,998,916. The 2012-13 tax will be levied at the rate of 19.2628 mills, on the assessed valuation at a rate of $19.2628 per $1,000 assessment; an increase of .6154 mills from the 2011-12 tax rate.

How does TESD tax increase of 3.3% increase for 2012-13 school year stack up against neighboring school districts? The following local school districts have approved their budgets for 2012-13 and needed to include the following tax increases:

Radnor School District: 3.21% tax increase

Great Valley School District: 3% tax increase

Haverford School District: 2.73% tax increase

Lower Merion School District: 1.99% tax increase

West Chester School District: 1.7% tax increase

Downingtown Area School District: 1.7% tax increase

Phoenixville School District: 1.66% tax increase

Unionville-Chadds Ford School District: proposed 2.65% tax increase in Chester County and a 1.74% decrease in Delaware County (the difference comes changes in the gross property valuation of the two counties) to be approved at UCFSD meeting on Monday, June 18.

Following the final budget summary, discussion and resident commentary, the school board members were presented the opportunity to weigh-in on why they were voted for or against the 2012-13 budget. The 2012-13 budget passed 7-2 with school board members Liz Mercogliano and Rich Brake providing the dissenting votes. Brake provided a lengthy 30-minute oration, which offered historical details of what brings the District to this point and his reasoning for voting against the 2012-13 budget.

Ray Clarke also attended the school board meeting and offers his thoughts on last night’s School Board meeting. Thanks Ray!

Comments from Ray Clarke …

1. Karen Cruickshank reported that the tone in the TEEA negotiations is “increasingly positive”. One small signal of this is the memorandum of understanding that removes the requirement for the district to pay for “advanced studies assistance”, in return for dropping the demotion idea for 2012/13. Amazingly, this saves $360,000 – and it’s not even all the tuition that is paid! (Payments are continuing for those on the lowest Bachelors steps).

2. The General Fund Balance debacle continues. At its root is the fact that the Board treats this as a completely discretionary slush fund, with absolutely no rules about how it is to be used. I believe that it is completely unacceptable for $30 million of taxpayer money be be treated so cavalierly. Just one example: last year the “commitment” for PSERS “stabilization” was $15.4 million, this year it’s $3.6 million. It’s not that the difference has been used to stabilize PSERS, it’s just that the number is a plug for when other things have been accounted for. Ridiculous. Why even have that item in the first place – we plan to raise taxes for it anyway.

Having said that, the changes in this year’s commitments do move us in the right direction. $10.4 million will be moved into the Capital Fund, where it will be used for the one time expenses that we’ve discussed here are the appropriate uses for the Fund Balance.

Also worthy of mention is the commitment for the liability for vested employee services. This went up by $0.8 million. The actual payment was $0.3 million; It’s interesting that the actual employment expense was therefore $0.5 million higher than was recognized in the operating statement, another problem deferred for future taxpayers.

3. Which gets me to Dr Brake. He treated us to a half hour analysis of the school district’s finances and the changes over the last decade or so, with desktop slides. I encourage all to look for the video. He voted against the tax increase, and argued for “an entirely new status quo” for the school employees. Here are some notes I took with my commentary:

– The drop in revenues from assessment appeals offsets the increase from increasing the tax rate for the exceptions. He used this to suggest we have reached taxing capacity.

– Special education is a “ticking time bomb” and the increased costs of autism “threaten public education”. Relatedly, we heard in the Policy Committee how parents of non-residents, shopping for schools, want the right to come into classrooms to observe TE”s special education programs.

– All entities (governments/households, US/Europe, etc) have a “pathological addiction to spending beyond our means”. [An OT comment: In a long run he’s right that this is unsustainable, but in the short run, national governments able to determine monetary policy can have a stabilizing role when consumers all of a sudden come to that unsustainable realization. The problem in the US is that the political actors cannot agree on the long run plan to get the house in order, and in Europe, they have a completely crazy monetary union without a fiscal union].

– For TE routinely taxing to the max is unsustainable and not the solution. I note that the agreed 3.3% tax increase this year, and the subsequent annual 3% increases in the 4 year projection model accumulate to an increased tax bill of $600 per year for the average residential assessment. And there’s still a $4 million deficit in 2016/16.

As part of the budget process for the T/E School District, a Tax Study Group composed of community volunteers was formed to determine the impact of an earned income tax (EIT) on residents and the school district. The goal of the group was to identify the pros and cons of an EIT for residents and then present their findings in a public presentation to the community. The Tax Study Group will offer its findings on Thursday, November 3 at 1 PM at the T/E Administration office, 940 W. Valley Rd, Suite 1700, Wayne and again at 7 PM at the Valley Forge Middle School, 105 W. Walker Road, Wayne. Please plan to attend so that you can make an informed decision on EIT (in the event it is on the Primary Election ballot in April 2012.

I have expressed my disappointment that the Republican candidates (school board and supervisor) took an advance stand against an earned income tax prior to the presentation of the Tax Study Group. In fairness to the process, and to the volunteer’s time of those serving on the study group, why not wait until after the presentation of the EIT before publicly declaring that you are against it. The severity of our school district’s economic situation requires that all options be explored – the presentation by the Tax Study Group on the earned income tax is one of those options.

An ‘As I See It’ article written by John Petersen, resident of Paoli appeared in the Main Line Suburban newspaper a couple of weeks ago. The article was written shortly after the first bright yellow, ‘no EIT’ signs began appearing in the township. Because the article was not included on Main Line Media’s online site, I could not provide a link on Community Matters.

It is with permission from the author, that I include the article below:

As I See It: Those little yellow GOP signs: proof the GOP does not respect you

If you have been driving around Tredyffrin (since this is not a walking township), you may have noticed a new type of yellow growth sprouting up all over the place. Naturalists have classified it as Fungi Reipublicae. In fact, these yellow growths are actually a new version of the yellow GOP signs that we saw in 2007. These signs come in two flavors: “No Earned Income Tax” and “Top Ranked Schools.” Both cite that you should “Vote Republican”. Let’s break down the claims.

No Earned Income Tax

This sign would have you think that there is an active question in front of the voters and that if you vote Republican, you will be saved from the evils of an Earned Income Tax. Let’s set aside the fact that many already pay an EIT for a moment and instead, concentrate on the straw man argument that Tredyffrin GOP is perpetuating. In fact, there is an earned income tax study committee that has been commissioned by the school board. That committee was first suggested by Republican school board member Kevin Mahoney. To review, there is no active tax question in front of the voters and the only group that is studying the feasibility of an EIT in Tredyffrin was suggested by a Republican.

Top Ranked Schools

It’s true, T/E Schools are quite good. The Tredyffrin Republican Committee would have you believe that Republicans, and Republicans alone are responsible for our “top ranked schools.” In fact, there are a number of Democrats on the school board. I guess they have nothing to do with the successes. Fine, let’s give all the credit to the Republicans. But if we do that, let’s examine the whole cloth. Of Lower Merion, Radnor and T/E, is T/E the best? In terms of facilities, absolutely not. While T/E has retrofitted old buildings, both Lower Merion and Radnor have made a commitment to invest in infrastructure, the type that is required for children to get a top-notch public education in the 21st century. As for test scores, college acceptance, etc – Lower Merion and Radnor are at least as good as T/E.

How about labor relations? T/E is definitely not at the top of the class there? How about fiscal responsibility? T/E is about 9 Million in the hole. You know all of the sweetheart deals for teachers the Republicans are complaining about? Guess what, it’s the Republican led school board that has consistently given the unions what they wanted. At the same time, they are not keen on paying for it. Those same Republicans have consistently raised our property taxes year after year. And yet they are the same people who claim to be protecting us from the evils of an earned income tax.

Any organization that would try and sell the political rhetoric that we see in these yellow signs clearly does not respect their customer. The Republicans believe that we are all too stupid and too quick to fall into the fear trap. The Republicans are banking on the fact that we will believe the scare tactics that the other side is just out to tax and spend our money. Seems to me, the Tredyffrin Republicans have done a good job of that on their own already. They don’t need help from anybody! And never forget, the Tredyffrin Republicans is the party of Bob Lamina, and Paul Olson. If that is not enough reason to give the Tredyffrin Republicans a vote of no confidence, I don’t know what is.